June 7 (Reuters) - Yelp can pursue a lawsuit

accusing a reputation management company of fraudulently

advertising its ability to remove "bad" reviews from the

business review website.

In a decision late Thursday night, U.S. District Judge

William Alsup in San Francisco said Yelp can pursue trademark

infringement and unfair competition claims against ReviewVio,

which operates as Dandy.

Yelp said ReviewVio's ads, which include the Yelp logo,

harmed its reputation by suggesting that businesses could pay

for artificially inflated star ratings.

This allegedly undercut honest businesses that will not pay

to remove negative reviews, and undermined the usefulness of

Yelp's website to consumers.

Yelp also said it lost ad revenue from businesses that paid

for "review gating," which the company prohibits, or incorrectly

believed that Yelp endorsed the practice.

In a 27-page decision, Alsup said Yelp sufficiently alleged

that ReviewVio's conduct could cause confusion about the

companies' relationship.

"The allegations make plausible that ReviewVio's alleged

marketing influences (businesses') choice to purchase Yelp's ad

services, ReviewVio's review management services or no services

to promote themselves at all - believing the game rigged," he

wrote.

Alsup said Yelp can seek damages for ReviewVio's alleged

misrepresentations to businesses, but not to consumers.

In seeking a dismissal, ReviewVio said there was no evidence

of confusion, or that it "partook in any sort of immoral or

unethical behavior."

Lawyers for ReviewVio had no immediate comment.

James Daire, associate legal director at Yelp, said the San

Francisco-based company was pleased with the decision.

"The court has recognized the harm caused by practices like

review gating, which deceptively cultivates positive reviews on

public platforms and diverts criticisms to private channels," he

said

The case is Yelp Inc ( YELP ) v ReviewVio Inc, U.S. District Court,

Northern District of California, No. 23-06508.